Do solar panels increase your home value?

Installing solar panels on your roof doesn’t just save you money on your electric bill — it also increases the value of your home. Most people tend to think of more traditional home improvements like a kitchen or bathroom renovation when they consider ways to improve the resale value of their house, but going solar is a reliable way to increase your sale price, make your home more attractive to prospective buyers, and eliminate your monthly electric bill in the process.

For most homeowners, buying solar panels is an investment that will increase your home’s value. According to Zillow, homes with solar panels sell for about 4% more on average than comparable homes without solar panels. In some areas of the country that number is even higher: in high-demand regions like New York, homes with solar can sell for as much as 5.4% more than similar homes without solar energy systems. 

The other major financial benefit from your solar panels is the monthly savings you gain by eliminating or reducing your electric bill.  If you're considering going solar as a way to improve the resale value of your home, remember that increased property value is only one component of solar's financial benefits. That value doesn't take into account the month-to-month savings you will see on your electricity bill – money that you can use to make other investments, like finally adding those granite countertops or investing in the stock market. Depending on where you live, you’ll save anywhere from $100-$250 a month, which can add up to almost $3,000 a year.

Solar panels are also a great way to make your home stand out in a competitive housing market. As low inventory continues to plague markets across the country, if you’ve made a home improvement like solar panels, your home will be more appealing to more buyers for numerous reasons. The new owners will inherit the benefit of having no electric bill or a smaller monthly bill if they’re taking over your solar loan payments, which tend to be less than whatever you would be paying monthly for electricity. Plus, according to EnergySage data, most people tend to pay off solar loans in as little as five years, which means the new homeowner might have no payments at all – a definite plus when you’re looking at a long-term investment like a house.

There are a few main factors that impact how much value going solar will actually add to your property. The most significant ones are the cost of electricity in your area, how much energy your household uses each month, and how you plan to pay for your solar panels. The more expensive your local electric rates are, the more savings you'll see from going solar. When it comes to paying for your solar panels, you'll get the most value if you pay for them upfront in cash. That's because you'll get rid of your electric bill right away, and you won't have to pay any additional interest on your solar purchase like you do if you take out a solar loan. However, most solar loans don't require a down payment and your monthly loan payment will typically be lower than your previous electric bill.

Multiple studies by the Lawrence Berkeley National Laboratory (LBNL), a research laboratory funded by the U.S. Department of Energy, have shown that solar can improve the value of your home. LBNL's 2015 Selling Into the Sun report analyzed sales of homes with solar photovoltaic (PV) panels in eight different states over 11 years, with the goal of determining just how much value solar can add to your home. The study found that, on average, homebuyers are "consistently willing to pay PV home premiums" of approximately $4 per watt of installed solar capacity. For a 6-kilowatt (kW) solar PV system, that means solar can add as much as $24,000 to home resale value, providing you with significant savings.

Another study cited by the National Renewable Energy Laboratory (NREL) in the Appraisal Journal says that solar increases home value by $20 for every $1 reduction in annual utility bills. For example, that means a solar panel system that saves you $400 each year would add about $8,000 in value to your property. The takeaway? The more your solar installation saves you on annual electricity bills, the more value it adds to your property.

According to EnergySage data, the average cost of a solar panel installation in 2024 was $2.86/watt, which means an average 11-kilowatt (kW) system will cost you about $22,000 before tax breaks and other incentives. Those incentives drastically reduce your system's cost: once you subtract the value of the 30% federal solar tax credit, your total solar installation costs are about $15,400, and that’s not including any state or local incentives that you also qualify for. So if you end up selling your home for 4% more, you're most likely recovering your solar costs, and then some.

If you compare installing solar panels to other kinds of renovations you can see why going solar often makes more sense than other options. Take renovating your kitchen, for example. If you can’t afford to pay for your new kitchen in cash, you’ll have to take out a construction loan or a home equity loan to cover the cost, and you could be stuck paying off that loan for decades to come. When it comes to solar loans, however, EnergySage data shows that most homeowners pay off those loans in as little as five years. Homes with complete kitchen remodels see a 75% cost recovery, according to the National Association of Realtors, whereas solar panels are a 100% cost recovery opportunity because on top of your home’s increased value, they also cut out your electric bill completely, which means you’re saving money for decades into the future.

Overall, solar panels can benefit you more than other kinds of renovations because they increase your home’s value, eliminate or reduce your electricity bill, and can make your home more attractive to prospective buyers. You can also have solar panels installed in just one day, rather than disrupting your life for months on end with other kinds of home improvement projects. Plus, when it comes to solar, you’re also doing good for the environment by powering your home with clean energy.

How much value do solar panels add to a home?

According to a Zillow study, a solar installation can increase a home's resale value by about 4%, or up to $6,000 for each kilowatt of electricity you have installed.

Is solar for your home a good investment?

For most homeowners, solar panels are worth it. Over the lifespan of your panels, you will likely see tens of thousands of dollars in energy savings. Plus, you’ll be generating clean, renewable energy for your home which is good for the environment.

You can speak with one of our Energy Advisors for free to answer any questions you have about the process of going solar. The EnergySage Marketplace gives you the opportunity to receive bids from multiple installers in your area who are competing for your business. You can compare the quotes you receive side-by-side so that you feel confident you’re making a sound financial decision